For many young people beginning their freshman year in college, the excitement of independence is often matched by a new and unfamiliar challenge of managing their own finances. From budgeting for meals to balancing tuition-related expenses, financial literacy is quickly becoming a critical skill that can determine how successfully they navigate these formative years.
Rose Miller, Financial Education Consultant at the JN Foundation, says equipping young people with practical money-management knowledge can help them build secure and independent futures. She adds that financial literacy is increasingly being recognised as a critical life skill that should be introduced early in students’ education and will prove especially valuable as they transition into college life.
“Financial literacy is a life skill, an essential foundation for lifelong success. It will equip students with the knowledge to manage money wisely from an early age,” says Mrs Miller. “They learn how to create a budget, save regularly, spend responsibly, and distinguish between needs and wants. The earlier students learn how to manage money wisely, the better prepared they will be to build a secure, independent, and successful future.”
She adds, “And while financial literacy is much more budgeting, saving and spending, it's a good foundation on which students can build, incorporating the other key concepts as they transition into adulthood.”
A Bank Account Can Help You Grow
Although financial literacy extends beyond basic budgeting and saving, Mrs Miller says these elements are essential building blocks. As students grow older, they can expand on the foundation to include more complex financial concepts, such as investing, credit management, and long-term financial planning.
“The challenge of managing finances is not limited to young people,” Miller points out. “Millions of individuals struggle with money management regardless of age. However, the core principles remain consistent, save before spending and live within one’s means. For students, this may involve practical steps such as reducing unnecessary expenses or adopting habits like preparing meals at home instead of purchasing them.”
To help bridge financial gaps, Mrs Miller encourages students to explore additional income opportunities.
“Pursuing additional streams of income is one way to close the gap in the budget but certain fundamentals such as good time management are necessary,” she advises.
“If students have a skill they can monetise that would be something they can pursue, they can also seek out paid internships to utilise these skills.”
“Conduct a needs analysis,” she urged, “and if one is identified then try and fill that need oor offer to do simple tasks or additional chores for a fee,” she adds.
The financial education consultant adds that introducing students to formal banking systems is another important aspect of financial education.
“As we seek to encourage students to save, we should also encourage them to save in the right place, a bank. This way their money will be safe, they will have access to other services- such as credit- receive interest and not be among the persons who are considered ‘unbanked’. This practice helps to support a healthy economy, something every student should be aware of,” she advises.
She says by maintaining a savings account, students are exposed to concepts such as interest, banking fees, and use of debit cards among services, among other concepts, which increases their level of financial literacy.
“With a savings account, students gain hands-on exposure to how the financial system works,” Mrs Miller explains.
Increased Importance of Financial Literacy
The shift towards digital banking has further underscored the need for financial literacy.
“With the increase in online transactions and digital banking it is necessary to have these facilities set up so you can fully participate in the banking system. It's very convenient, safe, you have access to carry out transactions 24/7, can also monitor accounts, and particularly with online banking there's a record of all transactions for a year or more in some instances so tracking will be much easier,” she says.
For students who are employed during the summer through internships or work and travel, Mrs Miller also recommends the following tips that will help during the school year.
“Ensure you have a bank account,” she says. “Write down the goal(s) for the money. Ensure that at the end on the work experience you have contributed as much as possible to the goal(s) you established.”
